As the time draws near for the governor and leaders of the General Assembly to fish or cut bait when it comes to pension reform, it may be time to sharpen the knives.
The so-called “Keeping the Promise” pension proposal rolled out last week sounded and looked impressive at the news conference.
However, an actual legislative bill has yet to be written or pre-filed. A quick analysis of the sketchy plan shows that legislators would have to give up their sweetheart of a retirement plan.
Frankly, we’ll believe that only when we see it happen.
The proposal backed by Gov. Matt Bevin, House Speaker Jeff Hoover and Senate President Robert Stivers doesn’t appear to protect current or future public employees and retirees with a flat guarantee of retirement with financial security.
Neither is the proposal good news for Kentucky taxpayers.
We would be liable for even more funding for several years as the state absorbs the cost of paying existing pension obligations, in addition to contributing new monies to the proposed individual retirement savings plans.
But the worst-case scenario may be the challenge of hiring future public workers.
Relatively generous retirement plans in the past have enticed current and former employees to work for lower pay.
Less retirement security means that recruiting and retaining new employees will become even tougher, particularly in smaller agencies, school districts and local governments with the lowest pay schedules.
At this point, we believe a reasonable person would ask why would we consider such a solution with its built-in problems.
The pure and simple answer is that the long-awaited fix of our pension mess must not look, feel or smell like a tax increase.
Most of the “New Majority” of Republicans in the House and Senate will stand for reelection in 2018 and none of them want to go on record favoring a tax increase.
In our view, they don’t seem to care or even acknowledge that the state has not enacted a general revenue increase since the sales tax went to six percent in 1990…27 years ago.